ABSTRACT
There are two obvious, and complementary, ways to track the performance of PROPER: one is to look at the evolution over time of firm rankings, and the other is to observe emission levels. The present chapter concerns the latter while Chapter 6 builds on the former, combining this with other data to better understand which firms improve their ratings. In June 1995, the plants that were selected to participate in PROPER were given private notification of their ratings as of that date. They were also informed that updated ratings would be publicly disclosed in December 1995 and at regular intervals thereafter. Figure 5.1 illustrates the evolution of PROPER ratings of those firms that were rated four times from June 1995, when the program started, to June 1998, when the program closed. There is an apparent improvement in ratings in the period prior to the Asian financial crisis, June 1995–July 1997 (in 1998 the financial crisis had completely set in and the rankings showed a setback). In particular, there is a clear and consistent increase in the proportion of compliant firms, i.e. those rated blue or green. These improvements in environmental indicators resulted in a considerable enthusiasm for PROPER-like policy making around the world. The scheme was in fact considered an inspiring experiment and several other countries set off to emulate various aspects (see World Bank 2000). 1 Our purpose in this chapter is to subject this “success story” to more systematic statistical scrutiny. Evolution of rankings, period 1995–98. https://s3-euw1-ap-pe-df-pch-content-public-p.s3.eu-west-1.amazonaws.com/9780203076729/c3fe2a2c-b0c4-4389-89ae-b913ff71a181/content/fig5_1_C.jpg" xmlns:xlink="https://www.w3.org/1999/xlink"/> Note: The figure includes data on a total of 168 firms that were rated in the four rating rounds.
